$30 Million Lawsuit Against Dallas Revived

February 10, 2017
By David Lee

DALLAS (CN) – A Texas appeals court reinstated the bulk of a natural gas driller’s $30 million lawsuit against Dallas, alleging a bait-and-switch scheme in which the city accepted money for mineral rights but denied the necessary drilling permits.

In its 3-0 ruling Tuesday, a panel with the Fifth Court of Appeals in Dallas reversed the trial court’s dismissal of Trinity East Energy’s tort, breach of contract and declaratory relief claims. The firm sued the city in February 2014 in Dallas County Court after it paid Dallas $19 million for oil and gas mineral rights on 3,600 acres of city-owned land northwest of downtown.

Trinity claims the city disregarded its “constitutional and contractual obligations” when its Planning Commission rejected the required permit applications in March 2013. Trinity appealed to the City Council, which also rejected the permits.

Trinity claims it has spent $30 million relying on the city’s promises and has “lost hundreds of millions more in lost profits.”

Writing for the Fifth Court, Justice Elizabeth Lang-Myers rejected Dallas’s claim of governmental immunity. She concluded the city engaged in a proprietary function instead of a governmental function when it leased the mineral rights.

“Trinity alleged that the city was suffering a budgetary shortfall and was seeking sources of additional revenue,” the 16-page opinion states. “A city employee testified that the purpose of the leases was ‘developing the city’s minerals in a safe and efficient manner that both protects the public safety and promotes the maximum revenue for the city.’ These functions would benefit the residents within the city’s corporate limits, but they would not benefit the public at large, that is, the state.”

Nor was Lang-Myers persuaded by Dallas’s argument that Trinity’s real gripe was with the permit denials, which Dallas considers “garden variety” zoning denials. It unsuccessfully argued that Trinity cannot have a complaint “centered directly on a governmental function” that splits “various aspects of the operation and recharacterize some of them as proprietary.”

The appeals court wrote in its judgment: “We REVERSE that portion of the trial court’s order that granted Appellant/Cross-Appellee City of Dallas’s plea to the jurisdiction on Appellee/Cross-Appellant Trinity East Energy, LLC’s claims for breach of contract, declaratory judgment, common law and statutory fraud, fraud by nondisclosure, promissory estoppel, negligent misrepresentation, and attorney’s fees, and REMAND those claims to the trial court for further proceedings consistent with this opinion. We AFFIRM the trial court’s March 18, 2016 order denying the City of Dallas’s plea to the jurisdiction on Trinity East Energy, LLC’s claim for inverse condemnation.”

From Courthouse News.


Judge Says Dallas Can Bar Porn Trade Show

April 21, 2016
By David Lee
DALLAS (CN) – Dallas can ban the Exxxotica pornography trade show from the city-owned convention center because it is “both reasonable and viewpoint neutral,” a federal judge ruled Thursday.
U.S. District Judge Sidney Fitzwater denied Exxxotica organizer Three Expo Events’ motion for a preliminary injunction, finding that the Kay Bailey Hutchinson Convention Center is a limited public forum.
Three Expo sued the city in February on First Amendment grounds after the City Council voted 8-7 to ban the event as an impermissible use of a public facility under City Code.
The city responded that at last year’s inaugural Exxxotica at the convention center, prohibited sexual activities including “the fondling or other erotic touching of genitals, pubic region, buttocks, anus or female breasts” took place despite assurances to the contrary.
It also claims that Exxxotica failed to check identification as promised and that some attendees saw an unidentified young woman in the exhibit space who did not appear to be 18 years old.
Attorney General Ken Paxton entered the fray, saying in an amicus brief that the city acted within its power because the convention center is a nonpublic forum and a commercial enterprise.
Fitzwater agreed with the city that the convention center “is not a traditional” public forum.
“It is rented for commercial purposes. It is not akin to a sidewalk, street or park ‘that the public since time immemorial has used for assembly and general communication,'” the 32-page opinion states.
“Instead, the question in this case is whether Three Expo has demonstrated that the convention center is at least a designated public forum, which would place a heavier burden on the city to show that its action did not infringe Three Expos’ First Amendment rights, or is a limited public forum, which imposes a lower burden.”
Fitzwater cited evidence of video conduct at the inaugural Exxxotica that two Dallas police deputy chiefs and an assistant chief concluded were acts of public lewdness, and evidence of nine “Johns” being arrested who responded to ads police posted on a website referring to the event.
“Based on the record developed thus far, the court finds that the City has established that its decision not to contract with Three Expo in 2016 was reasonable in light of the purpose of the Convention Center,” Fitzwater wrote. “The City could have reasonably believed, having observed what transpired at Exxxotica in 2015, that it would be incongruous with the purpose of the Convention Center – i.e., to promote the economic development of the City – to host an event that would likely include public lewdness and other conduct that the City’s SOB [sexually oriented business] ordinance would permit it to regulate otherwise.”
Fitzwater concluded that the city was not “actually motivated by a desire to suppress” the plaintiff’s viewpoint, and that the ban was content- and viewpoint-neutral on its face.
“Three Expo has not presented any evidence that, in voting for the Resolution, City councilmembers were motivated by a desire to suppress Three Expo’s viewpoint,” the opinion states. “As the City points out in its brief, Three Expo has not clearly articulated any particular viewpoint against which the City could have discriminated.”
Mayor Mike Rawlings thanked attorney and City Councilman Adam McGough, “whose sound legal argument” to the council regarding use of the city’s sexually oriented business ordinance was a “key component” to the city’s defense.
“Many have criticized the City Council’s decision and the cost to defend it,” Rawlings said in a statement Thursday. “They predicted a quick loss in the courtroom. They were wrong. While this case is not over and this ruling does not guarantee what would happen at trial, I am extremely proud of the seven City Council members who had the courage to support this ban.”
Paxton too said he was “pleased” with the ruling.
“I was happy to join the Dallas Citizens Council in this effort that allows the city of Dallas to be a place where businesses can continue to flourish,” he said in a statement.

From Courthouse News.

Dallas Bans Transgender Discrimination

November 12, 2015
By David Lee
DALLAS (CN) – One week after Houston voters rejected an antidiscrimination ordinance that would have protected that transgender community, the Dallas City Council strengthened such protections with its own ordinance.
Dallas Mayor Mike Rawlings said after the vote on Tuesday that Dallas is “a very diverse city” and “we want to make sure everyone is protected.”
The council unanimously approved an amendment to Chapter 46 of the Dallas City Code, which already protected gay, lesbian and transgender people from discrimination in public accommodation, housing and employment. The ordinance now explicitly lists gender identity and gender expression as protected.
An LGBT taskforce headed by council member Adam Medrano had been working on the amendment for a year. Taskforce member Patti Fink told the council that any doubt over the inclusion of transgender people would be removed with the explicit inclusions in the amendment, and that transgender people can “see themselves very clearly” in the ordinance now.
“The transgender community believes they are not included because the definition of gender identity is stuffed into sexual orientation,” Fink told the council.
Only the individual can determine their gender “based on their perception of their gender” under the amendment. It encourages businesses not to deny service to protected people even if they are exempt from the antidiscrimination ordinance. The changes also repeal an exception that allowed property owners to refuse renting space to gay couples if the property has shared bathrooms.
Criticism of the changes came swiftly, with state Sen. Don Huffines, R-Dallas, calling for its repeal because it “was not reviewed or thoughtfully considered” by the public.
“Houston voters soundly said NO to men in women’s bathrooms,” Huffines tweeted. “Dallas’ new sneak-attack LGBT ordinance must be repealed and carefully reviewed.”
Council member Philip Kingston quickly fired back , telling Huffines to “stop lying” about the ordinance.
It “went through a year of public discussion and makes no change to the existing public policy of Dallas,” Kingston tweeted.
The vote comes one week after Houston voters repealed the controversial Houston Equal Rights Ordinance. Opponents successfully argued that passage would allow predators posing as transgender people to enter women’s bathrooms.
Houston remains one of the largest cities in America without a law to protect gay, lesbian and transgender people from discrimination. The measure would have banned discrimination based on gender, sexual orientation, race, age, disability and other grounds, in line with federal antidiscrimination laws.
Huffines targeted these kinds of ordinances when he authored Senate Bill 343 in January, after the suburb of Plano added protections for gay and transgender people to its equal rights policy ordinance last December. Huffines’ proposal would have amended the Texas Local Government Code to ban cities from enforcing ordinances that do not conform to state laws on the same subject.
A signature drive to force Plano officials to repeal the change failed when the city invalidated over 3,800 signatures.

From Courthouse News.

Dallas Admits Overpass Protest Ban is Unconstitutional

September 23, 2015
By David Lee
DALLAS (CN) – Dallas admits its ban on highway overpass protests was unconstitutional and will pay protesters $2 to settle their lawsuit.
Anti-Obama group Overpasses for America and a member filed a federal complaint against the city just over a year ago, alleging violations of the First Amendment.
The city passed the ban to prevent signs from distracting drivers. Violators could face criminal charges and up to $500 in fines. The ordinance was a response to a 2013 protest near the George W. Bush Presidential Library at Southern Methodist University.
Overpasses said it has held 75 to 100 “free speech assemblies” in the city and has never caused any public or traffic safety issue.
It held an assembly on a Northaven overpass on the Dallas North Tollway on March 1 and says there were no incidents, as it was organized in cooperation with Dallas police and the Dallas director of Homeland Security.
Overpasses said its signs were not tied to the overpass and complied with city ordinances.
“Plaintiffs were looking forward to holding the free speech assembly on March 15, 2014 and garnered a positive anticipation for their event,” the complaint stated. “Plaintiffs, however, were informed that they would not be allowed to hold their free speech assembly because the Dallas Police Department was now obligated to enforce the City of Dallas’ free speech ban.”
U.S. District Judge David Godbey approved the settlement Monday, finding the $1 in damages for each plaintiff is in “recognition of defendant’s violation” of the First Amendment.
“The nominal damages award represents a legal determination that plaintiffs suffered a deprivation of constitutional rights,” the 2-page final consent judgment states.
The city will pay the plaintiffs’ $25,000 in attorney’s fees.
The city repealed the ordinance three months after the lawsuit was filed, at the request of City Attorney Warren Ernst and the Dallas Police Department.
Jerad Najvar, an attorney for Overpasses in Houston, said at the time he was glad the City Council majority that approved the ordinance “now realizes its error.”
“The problem is that these concerns were raised before the ordinance was passed, and my clients’ rights have been violated,” he said. “The same council that passed this ordinance, ignoring free speech objections, would not have repealed it but for our lawsuit.”
Navjar said the city should “certainly” be on the hook for his clients’ attorneys fees.
“People in government have an obligation to consider whether laws are constitutional before they are enacted, because not everyone is able to find a constitutional attorney,” he said.

From Courthouse News.

Dallas Repeals Controversial Bag Ban after Lawsuit and State Legislature Threats

June 3, 2015
By David Lee
DALLAS (CN) – Facing a lawsuit and threats of state intervention, Dallas on Wednesday repealed a partial ban on single-use bags and refused to impose a harsher complete ban.
The Dallas City Council in March 2014 approved an “environmental fee” ordinance that required retailers to charge customers 5 cents for each single-use carryout bag, plastic or paper.
The ordinance has raised about $500,000 for the city since it took effect this year.
The council repealed the law by 10-4 vote Wednesday.
The vote came a month after four plastic bag makers sued the city in Dallas County Court, calling the ban an illegal tax preempted by state law.
The bag makers claimed they lost sales in Dallas and now have to make short manufacturing runs that add “considerable expense” to make the bags.
State Rep. Matt Rinaldi, R-Irving, targeted bag bans in February with House Bill 1939, which sought to allow businesses to provide customers with bags or containers “made from any material” at point of sale.
Rinaldi cited warnings by Gov. Greg Abbott that such bans are “Californianizing ” the state by “eroding consumer choice and the rights of business-owners.”
Also Wednesday, the council rejected an ordinance banning single-use bags, by 9-6 vote.
Mayor Mike Rawlings cited the lawsuit and possible state intervention in voting no, but said his vote was not in support of the lawsuit and that he wants the city clean.
Councilman Dwayne Caraway, the ban’s most vocal supporter, criticized the council for shifting the costs of cleaning up litter onto taxpayers.
“I was elected by the people, not the bag manufacturers,” Caraway said. “So we go back to being dirty Dallas. … We cannot just have a dirty, trashy city.”
Caraway also criticized city businesses for giving out the “cheap” single-use bags instead of reusable, costlier bags.
Councilwoman Jennifer Gates opposed both measures, saying bag disposal is an issue of personal responsibility for consumers and retailers.
Councilmen Rick Callahan and Sheffie Kadane noted that all litter is a problem and the laws against littering were on the books already.
“If the laws were working, we would not have this problem,” Caraway responded. “We need to protect the citizens.”
Rawlings said the city “is not doing a very good job enforcing the laws we have.”
In spite of voting for a complete ban, Councilman Adam Medrano voted to repeal the partial ban.
“We are in a lawsuit and I do not think it’s something we can win,” he said.
After the meeting, Gates tweeted that there were “no winners today,” only the council’s desire to make the right decisions for the city.
“Now residents, do your part and be responsible consumers,” she tweeted. “If behavior has changed regarding plastic bag use for the good, repealing the ordinance doesn’t have to change that.”
In spite of the good intentions of the city, the “environmental fee” was an impermissible tax, the bag makers argue in their lawsuit.
“It raises more revenue than is reasonably necessary to subsidize the city’s efforts to insure compliance with the ordinance,” the complaint stated. “The tax imposed by the ordinance is not authorized by the Texas Constitution or Texas statutes. It is not a property tax, a hotel occupancy tax, or one of the miscellaneous other taxes a city may impose. Nor is it a permissible sales tax. A city may impose a sales and use tax only if approved by a majority of voters in an election.”
The plaintiffs also cited a 2014 opinion by then-Attorney General Abbott that concluded such bag bans violate state law.
State Rep. Dan Flynn, R-Van, had asked Abbott for his opinion, citing concern with perceived abuse of power by municipalities.
“It’s not about Austin, it’s all about state authority and the power grab by some cities over state law, that’s just about the easiest way to say it,” Flynn said at the time.

From Courthouse News.

Don’t Californianize Texas, Lawmaker Says In Anti-Bag Ban Bill

March 2, 2015
By David Lee
DALLAS (CN) – Bans on single-use paper and plastic bags in Austin and Dallas are “Californianizing” Texas, says a lawmaker who filed a bill to prohibit such bans.
State Rep. Matt Rinaldi, R-Irving, filed House Bill 1939 on Feb. 25. It would allow businesses to provide customers with bags or containers “made from any material” at the point of sale.
“An ordinance or regulation adopted by a municipality purporting to restrict or prohibit a business from, require a business to charge a customer for, or tax or impose penalties on a business for providing to a customer at the point of sale a bag or other container made from any material is invalid and has no effect,” the bill states.
Rinaldi said he filed the bill to repeal bans “like those enacted by Dallas and Austin, which erode consumer choice and the rights of business-owners.”
“Gov. [Greg] Abbott warned that ‘Texas is being Californianized and you may not even be noticing it,” Rinaldi posted on his Facebook account. “It’s being done at the city level with bag bans, fracking bans, tree-cutting bans. We’re forming a patchwork quilt of bans and rules and regulations that is eroding the Texas model. I agree.”
Austin’s total bag ban was enacted in March 2013 and resulted in a lawsuit by theTexas Retailers Association , which claimed it violated state law.
Dallas’ partial ban was enacted in January. It imposes a 5-cent fee on consumers who want single-use paper or plastic bags. City officials said they wanted to promote a “culture of clean” through the law.
“The city of Dallas desires to protect the natural environment, the economy, and the health of its residents,” the ordinance states. “The improper disposal of single-use carryout bags has a negative impact on the environment by contributing to unsightly ugliness on the streets, sidewalks, trees, bushes, vacant lots, city parks, waterways, reservoirs and shorelines that is detrimental to the quality of life of residents, the property values of homeowners, and the tourism industry.”
The littering requires hundreds of volunteer hours to remove from trees, lots and roadways, city officials said.

From Courthouse News.